Profire Energy, Inc., a technology company that creates, installs and services burner management systems and other combustion technologies for the oil and gas industry, has acquired the assets of VIM Injection Management, Inc., an oilfield chemical-injection technology company based in Alberta, Canada. Profire paid a total of $1.75 million for the assets, comprised of $1 million in Profire's common stock and $0.75 million in cash.
In the oil and gas industry, chemical injection is used for a variety of purposes, including down-hole inhibition of wax, hydrates and corrosion agents to stimulate product flow more efficiently to the wellhead. Once at the wellhead, chemical injection can be used to further process the oil or gas before it is transported. Chemical injection at the wellhead can also be used to protect pipelines from corrosion which reduces pipeline failure and oil spills.
VIM management systems monitor and manage chemical-injection during these processes. The patent-pending technology is designed to allow producers to retrofit any existing pump with an advanced management system, providing pump monitoring and management to help ensure efficient chemical injection at each well. "Inaccurate injection levels are problematic due to the cost of chemicals which, when over-injected, result in a decline in profit margin for producers," said Shawn French, VIM president.
"However, under-injection can be an even larger issue. Under injection can cause problems in the well bore and pipeline impeding the ability to get the product to market. Due to specific pipeline regulations, oil and natural gas require chemical treatment to ensure pipeline integrity and product quality. If oil is determined to be of low quality, additional costly and time-consuming methods are required to improve the product and meet industry standards. The chemical injection management system is designed to accurately determine how much chemical is needed not only to reach optimal production levels, but help create a greener working environment in the oilfields."
In addition to improving efficiency of the pump, production of the well and helping the oil and gas industry become more environmentally friendly, these systems are designed to improve safety for workers that would otherwise be exposed to these chemicals and increase compliance with the requirements of pipeline operators.
Profire estimates a significant market potential for the systems, with 80 percent of North America's 1.3 million producing wells qualifying as potential installations. While the system price varies, return on investment in many cases are realized within 6-12 months.
"We believe the acquisition of VIM positions Profire as the strategic leader in chemical injection," said Harold Albert, Profire Energy's COO. "We are confident in our expertise with Profire's industry-leading combustion controllers and, by adding chemical controllers to our product line up, we strengthen our role as an oilfield technology leader. We believe the acquisition will broaden our industry-leadership by including cutting edge chemical-management technology systems that complement our accelerating burner-management product business. This is a significant milestone--one that allows us to more completely meet the needs of the market and enhance our relationship with many current customers as we bolster our product portfolio with another innovative management system for a new--but related--market. While there is currently no direct mandate for producers to purchase a chemical management system, the concept of environmental protection is one of keen interest for regulators. As with our other flagship products, we believe regulatory pressures may grow in coming years--though they aren't needed to grow the business in a meaningful way, due to the economic- and industry- incentives driving sales."